With little real news, the major averages look to end a lackluster week mixed. Since Monday the Standard and Poors 500 Index has gained about 7 points or .3%, while the NASDAQ is up 40 points or .8%.
As the data continues to trickle in economic growth estimates for the 3rd quarter get pushed slowly lower. The latest New York Fed Nowcast fell to 2.2% with the latest release, in contrast to the Atlanta Fed GDPNow model that increased fractionally to 2%. Assuming 2.1% 3rd quarter Gross Domestic Product or GDP that would put annualized economic growth for 2016 through 3 quarters at just 1.43%. Yet the media and Federal Reserve thinks the economy is doing just great, god only knows how they come to that conclusion.
While many cheer the benefits and innovations of the sharing economy, and there have been many. It has also transformed the economy and labor market in ways that are both positive and negative. With the so called “gig economy” shifting the burden of employment security from employers to employees, denying employees the few remaining benefits that remain with formal employment like workman’s compensation, disability and employer matched Social Security benefits to name a few. Something that will depresses wages even more, a trend that has been going on for 3 odd decades and which ultimately benefits capital or business owners creating a Dickensian model that will depress consumption and further income and wealth inequality. Henry Ford recognized the importance of well-paid labor when he doubled the wage of his factory workers in 1914 allowing them to purchase the cars they and he produced. A concept seemingly lost on today’s executives who apparently want to keep everything for themselves.